Apple unleashed Snow Leopard, the latest version of the Mac OS, late last night. PCMag's early testing proves it's a solid operating system—and at $29, something of a bargain. With Microsoft's "Vista" nearing dirty-word status and Windows 7 ($120!) still months away, you might think this stellar new OS will have months, if not years to steal market share from Windows. You'd be wrong. In terms of market share, the Mac is going to stay a minor player in the PC world. But that is OK, because Apple is way out in front where it really matters: mind share.
Few people know Apple's real market share in the U.S., let alone abroad. I asked five people here at the office and got estimates ranging from 15 to 30 percent. Everyone agreed it was rising—fast.
What is Apple's actual market share? According to IDC, it is 7.6 percent in the U.S. That puts Apple behind Dell, HP, Acer, and Toshiba. Worldwide, Apple's market share is even lower, probably around 2 to 3 percent. (Although Apple did recently pass 10 percent market share in Canada; Snow Leopard will find a welcoming habitat up North.)
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IDC isn't the only research firm running numbers, of course. Net Application's Market Share research shows just 4.86 percent of worldwide traffic coming from systems running the Mac OS. Even if you throw in iPhone users, the number barely passes 5 percent. Hardly a mass phenomenon.
I realize this is shocking to all those who walk into Starbucks and see MacBooks outnumbering PCs three to one. It is inconceivable to everyone who watches John Hodgman trip over USB cables while Justin Long boasts about being virus-free. I reveal these numbers not to bash Apple, but merely to make the facts known. It is for educational purposes only.(Speaking of educational purposes, I'm betting Apple's market share among students is much greater.) The numbers don't lie; well, at least they don't lie much. The fact is, Apple has a small sliver of the market and it isn't growing much. But here is the kicker: That's a good thing.
Small market share helps Apple stay small. The company employs about 35,000 people. Compare that to Dell's 78,900, Microsoft's massive 93,000, and HP's hulking 321,000 workforce. (See, there are practical applications for Wolfram Alpha.) Being smaller than its competition has helped Apple stay flexible and innovative. If it were the same size as Microsoft, it would move at the same speed. And then the iPhone OS would look like Windows Mobile.
Apple doesn't want to attract new customers—it mostly wants to keep its existing customers happy. Now, you might think that Mac people are so self-satisfied they don't need any help being happy. And you would probably be right. Still, these customers have proven they are willing to pay a premium for a product that is more commodified every day. In fact, Apple has a stunning 91 percent of the market for PCs that cost more than $1,000. Clearly, these are customers Apple wants to keep.
Plus, these extra funds fuel innovation.I don't have space here to go into all the reasons the Mac OS is so great, but our review covers it pretty well. Likewise, Apple's PCs have consistently been in the vanguard for performance and design, if not always features and value. Even market failures, like the MacBook Air, have spurred the industry forward and inspired copycats. If you doubt it, just count the number of one-inch thick, CULV-based systems that will be on store shelves this fall.
I'm not saying Apple doesn't want to grow its market share, just that it doesn't have to. The company has cherry-picked the most attractive customers, side-stepped price competition, and made everyone who isn't using a Mac just a little uneasy that they are missing something. Snow Leopard won't move Apple's market share up much, but it will be enough for the company to maintain its mind-share dominance.
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